Want to Improve Your Credit Score Rating? Read This
A bad credit score can have a great impact on your life in many different ways. From potential employers to insurers, many types of businesses check your credit score to know how reliable you are. If your credit score is low, it may hurt your chances of getting an apartment, a decent rate on your car insurance, a cell phone contract, or a job.
Luckily, you can improve your credit score and get your credit back on track by following a few simple strategies:
Check Your Credit Report
Your credit score depends on the information in your credit report. It is a summary of your borrowing behavior, that has been put together by one of the 3 major credit bureaus: Transunion, Experian, and Equifax.
These companies depend on lenders to report information about your borrowing behavior to them. Sometimes, lenders might make mistakes since they aren’t perfect, which can drag down your credit score.
Hence, it is recommended that you regularly check your credit report, so that you can fix any errors that could hurt your score.
Pay Bills on Time
The single best thing you can do to improve your credit score is to make on-time payments. A serious dent in your credit rating can be made even if you delay paying your bill by a few days. Always remember that the later you make your payments, the more your score is hurt. You can outweigh your late payment mistakes by paying your bills on time henceforth. Your score will continue to increase if you consistently make your payments on time. What’s more important is your recent behavior – as long as you keep paying your bills on time, your score will continue to improve.
Pay Down Debt
Another major factor that affects your credit score is how much credit you utilize. This portion of your available credit that you use is referred to as your utilization rate. For example, if you have a credit card limit of $3,000, and your balance is $1,500, your utilization rate is 50%.
Credit bureaus suggest that this rate should be no higher than 30%. The more debt you clear, the higher your score will be. In the example mentioned here, you can pay off $600 to get your card balance to a utilization rate of 30% ($900).
But, your credit score doesn’t only depend on the credit you’ve used. It also depends on the number of accounts you owe money on. If you have different cards with small balance amounts, pay them all off and give a quick boost to your credit score.
